Because cars and trucks are so expensive, you probably cannot afford to pay the full price right up front. Instead, you have to take out a loan.

Places that offer financing for cars and trucks include:

Banks

Credit Unions

Independent lending companies

Lending companies owned by vehicle makers

In the typical loan arrangement, your lender gives the dealership full, up-front payment for your desired vehicle. You then pay back the lender in monthly installments over a set number of years.

Factored into each monthly payment is an amount of interest. This interest is charged at an annual fixed rate and is the profit the lender earns from giving you that loan.

The interest rate the lender sets depends on two things — what the lender thinks you will pay and what the law allows them to charge you.

The law says that lenders cannot charge more than 16 percent interest rate on loans. Unfortunately, some lending companies owned by or affiliated with vehicle makers have devised schemes whereby you are charged interest at rates exceeding the maximum permitted by law. This is called usury.

Carmaker-Owned Lenders Know That You Have Few Choices

People pay usurious interest on their vehicle loans either because they don’t know there are caps on allowable interest rates or they have no choice. Carmaker- affiliated lenders know this. That is why some of them fix their interest rates higher than the law allows.

They recognize that your automobile is indispensable — it gets to and from your job and everywhere else you need to go. At the same time, they know you cannot buy that vehicle without their financial help.

They bet on the fact you won’t object when they charge usurious interest rates.

But usurious interest rates disproportionally hurt individuals who are the least able to pay such rates — they are financially devastating. Here’s how. The higher the interest rate, the more expensive the vehicle becomes over time.

For example, say you bought a car for $20,000. You take out a loan for that amount and plan to pay it back over five years. The lender charges an interest rate of 5 percent.

By the end of those five years, you will have paid a grand total of about $22,600. If the interest rate is 24 percent — a usurious rate in New York — you will have paid approximately $34,500 for that same vehicle.

Or say you want smaller monthly payments. To lower them, your loan must be extended. So you agree to repay the $20,000 over seven years. By the end of the loan term, at 24 percent you will have paid nearly $41,500 for the vehicle.

Consumers Are Taking Action Against Usury Lawbreakers

In New York state, the most a lender can charge for annualized interest is 16 percent. However, one of our New York clients was charged an annualized interest rate of nearly 24 percent for his vehicle loan.

He would have had to pay nearly double the purchase price of the vehicle by the time he made his final payment. But he seeks to avoid that outcome by fighting back.

By participating in a class-action lawsuit we filed, our client — and many others harmed in the same way — may not have to pay any unpaid principal or additional interest on their car loans.

They also may be able to get back all the interest they already paid that was more than the 16 percent annual legal limit.

You Should Be Compensated for Car-Loan Usury

It is the practice among some dealerships to aggressively push buyers into loans from lenders owned by or affiliated with the manufacturer of the car or truck being bought. These loans often come with usurious rates of interest.

We are litigating against this unconscionable practice and fighting to stop it.

You should never have to pay a penny more in interest above the amount a car-loan lender can legally charge you.

If you own a car or truck purchased with financing obtained from a lender owned by or affiliated with the vehicle’s maker, and you pay a higher interest rate than is allowed in your state, you may be entitled to compensation for usurious interest rate charges.

How Weitz & Luxenberg Can Help

As a nationally recognized personal injury, consumer protection, and class action law firm, Weitz & Luxenberg is committed to helping clients win cases. For more than 25 years, we have dedicated ourselves to holding irresponsible practitioners accountable, and we have won $17 billion for our clients.

We would feel privileged to assist you. For a free consultation and more information about your legal options, please call us at . If you prefer, you can complete our form, and our client relations representative will contact you shortly.